1
Q
Characteristics of a liability
A
Present obligation
Transfer of economic resource
Arises from past event
2
Q
Types of present obligation
A
Legal
Constructive
3
Q
Measurement of current liability
A
Face amount (not discounted)
4
Q
Measurement of noncurrent liability
A
Initial - present value
Subsequent - amortized
5
Q
Classification of a current liability
A
Expected to be settled within the entity’s operating cycle
Held primarily for trading
Due to be settles within 12 months after the reporting period
Does not have the right at the end of the reporting period to defer settlement of the liability for at least 12 months after the reporting period
